Hypoxia can induce erythropoiesis through regulated increase of erythropoietin production. We investigated the direct influence of oxygen tension (pO2) in the physiologic range (2-8%) on erythroid progenitor cell differentiation using cultures of adult human hematopoietic progenitor cells exposed to decreasing (20 2%) pO2 and independent of variation in Epo levels. Decreases in hemoglobin-containing cells were observed at the end of the culture period with decreasing pO2. This is due in part to a reduction in cell growth, and at 2% O2 a marked increase in cell toxicity. Analysis of the kinetics of cell differentiation showed a premature increase in glycophorin A expression and in hemoglobin accumulation at physiologic pO2. The cells were characterized by an early induction of gamma-globin expression and a delay and reduction in peak levels of beta-globin expression. Overall, fetal hemoglobin and gamma-globin expression were increased at physiologic pO2 but the increases were reduced at 2% O2 as cultures become cytotoxic. At reduced pO2, induction of erythropoietin receptor by erythropoietin was decreased and delayed, analogous to the delay in beta-globin induction. The oxygen dependent reduction of erythropoietin receptor can account for the associated cytotoxicity at 2% O2. Erythropoietin induction of erythroid transcription factors, EKLF, GATA-1 and SCL/Tal-1, was also delayed and decreased at reduced pO2, consistent with lower levels of erythropoietin receptor and resultant erythropoietin signaling. These changes in erythropoietin receptor and globin gene expression raise the possibility that the early increase of gamma-globin is a consequence of reduced erythropoietin signaling and a delay in induction of erythroid transcription factors.